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International Log & Sawnwood Prices

16-31th January 2013



  Drop in EU forward contracts
A rather subdued stability was maintained in the volume of trade and in prices during the second half of January. Exporters are waiting to see the market reaction when the EUTR comes into force in March.

Exporters have seen some advance buying by European importers for very specific requirements but there has not been an big increase in orders so price levels have not been affected.

Understandably, EU importers are not inclined to place sizeable orders for forward shipments in the second quarter unless they are absolutely sure that suppliers will be able to provide paperwork showing proof of legality with each shipment.

There were no major price changes in the second half of January and the short-term market outlook is difficult to determine but likely to remain stable but unexciting.

Trade confident in meeting EUTR requirements
W. African millers are being bombarded with offers from certification companies in their long running argument about which scheme is best and which will best satisfy the due diligence requirements of the EUTR.

W. African producers, who do not have FSC or PEFC certification or any other third party oversight, should be able to provide proof of legality for shipments through documents from their forest authorities which closely scrutinise their operations.

Analysts point out that, for some countries, the so-called ¡®family cutting rights¡¯ that allow villagers in forest areas to harvest a certain number of trees each year for local use, could be an issue in application of the EUTR.

It is difficult for the authorities to oversee or regulate harvesting under such ¡®family cutting rights¡¯ and there is always a risk of some unauthorized logs or sawnwood ¡®leaking¡¯ into the main supply chain. However, if this did occur the volumes would be small.

Millers and exporters in W. Africa are very cautious about purchasing logs or sawnwood without indisputable and official proof of legality.

Exporters look to expand markets beyond the EU
The perceived risks to trade from the EUTR has encouraged some W. African exporters to focus on markets and importers outside the EU where the timber is used for manufacturing wood products to be consumed locally and not for export to the EU.

Analysts report an increased in this business in the vast Middle East market, mostly at the expense of Far East markets.

In addition to growing markets in the Middle East, South Africa has become a steady buyer of Central and West African wood products, albeit in a restricted number of species, at very keen prices and with strict requirements on the timing of shipment.

Gabon Forest Authority tightens up on inspections
The industry is reporting that the Gabon Forest Authority has tightened up on monitoring compliance with forest regulations and on control over forest concession holders, producer mills and exporters. Inspections have been stepped up in the forests, at mills and in the port where containers are regularly inspected.

The port inspections, say analysts, have caused some congestion and delays in the loading of vessels in recent months but the action by the forest authority reassures buyers that the government is taking strong action to enforce its forest regulations.

Processing to buyer specifications generates a price premium
Some saw millers in Cameroon are reporting a shortage of logs and are now engaged in the annual negotiations for cutting rights and cost of levies and fees.

In the region, mills are beginning to concentrate on further processing as buyers are calling for and are prepared to pay a premium price for sawnwood surfaced to precise sizes.


 Implementation of VPA in Ghana
The Government of Ghana and the EU concluded negotiations on a Voluntary Partnership Agreement (VPA) in September, 2008 and both parties signed the world¡¯s first FLEGT VPA on November, 20th 2009.

Through implementing the VPA Ghana wood product manufacturers will be able to satisfy demands in the market for proof that traded wood products are legal.
Through the VPA Ghana also seeks to achieve the following:

  governance reforms within the forestry sector

  sustainable forest management

  realisation of the full economic value of forests

  viable forest sector which contributes to poverty alleviation

Piloting Legality Assurance System (LAS) completed
A key element of the VPA is the implementation of a Legality Assurance System (LAS).

Between 2010 and 2011 the Government of Ghana piloted its LAS and the associated Wood Tracking System (WTS). The results of this pilot have been used to prepare for the national ¡®roll-out¡¯ of the WTS.

The Government of Ghana has contracted a Consortium ¨C Ata Marie Group to further design and develop the WTS and assist in its national roll-out.

Interim arrangements in advance of compliance with VPA
Ghana is however, unable to meet the EUTR (EU Timber Regulation) effective date of 3rd March, 2013.

As FLEGT Licensed wood products will not be available for some time the Ghana Forestry Commission is working with stakeholders to put in place interim arrangements to assure overseas buyers of the legality of the raw materials used by manufacturers.

Programme launched to highlight VPA progress
The Ghanaian authorities have embarked on a programme to raise awareness and inform stakeholders on progress in implementation of the VPA in Ghana.

This programme will be undertaken during February and March this year in both Ghana and the EU.

The Ghanaian authorities also seek to exchange views with the Competent Authorities in the EU in respect of the progress in implementation of the VPA in Ghana.

Ghana has, through the VPA process, targeted the development of its domestic market and has developed a public procurement policy to promote the use and trade in legal timber in the domestic market.

Revenues from timber exports fell in September 2012
The latest available data shows that the total value of wood products exported in September 2012 amounted to euro 7.54 million, an approximate 13% decline from the euro 8.64 million earned in August 2012.

There was a corresponding 10% drop in the volume of exports from 21,235 cu.m in August to 19,112 cu.m in September 2012.

The volume of air dried sawnwood exports between August and September 2012 increased by 3.5%, while export volumes for other products fell in the same period.

Exports of plywood, dowels, mouldings, air dried boules and poles also fell in September compared to levels in August.

The shares of the primary, secondary and tertiary product exports in September were 3.7%, 93.3% and 3.0% respectively.

John Bitar & Co. Ltd was the leading exporter of plywood and kiln dried sawnwood to markets in Nigeria, Burkina Faso and Benin. These markets accounted for about 13% of total export earnings from wood products.

In terms of export markets by region, African markets accounted for 47.5%, Asia/Far East 26.8%, Europe 16.1%, Middle East 5.0% and N. America 4.6%.

For timber export to the ECOWAS market, Nigeria¡¯s imports accounted for 55% in terms of volume and 60% in terms of value.

New Minister for Lands and Natural Resources
The Ghanaian President His Excellency, John Dramani Maham, has nominated Alhaji Inusah Fuseini as the new Minster for the Ministry of Lands and Natural Resources. The nomination of the Mr. Fuseini was among the first ministerial appointees presented to Parliament¡¯s Appointment Committee for vetting and approval.



  Production set to halt for Chinese New Year holidays
As the Chinese New Year holidays approach the timber industries in Malaysia are beginning to wind down production and prepare for a shut down from the first week in February. Sawmills, especially in Peninsular Malaysia, will shut for an extended break in early February.

Rubberwood furniture maker invests in plantations
The Malaysian Star newspaper reported (22/1/13) Celment Hii, director of the country¡¯s largest rubberwood furniture manufacturer SYF Resources Bhd, as saying the company does not expect to be seriously affected by the current global economic slowdown and the narrowing of profit margins.

Hii said the company has diversified upstream through investment in rubber plantations in order to secure its rubberwood raw material supply.

On a year-on-year basis, SYF¡¯s revenue for the last quarter of 2012 grew from RM42.98mil in 2011 to RM58.07mil last year.

WTK to maintain cap on production until demand improves
The Star newspaper also reported on WTK Holdings Bhd, a major log supplier based in Sibu, Sarawak. WTK produced 441,471 cu.m of logs in 2012 compared to 530,864 cu.m in 2011. WTK produces plywood and other wood products. The company says it will continue to cap production of logs until the demand improves thus continuing the same reduced production policy adopted in early 2012.

The company cited the uncertainty in major markets and resulting reduced consumption as the main reason for the decision to reduce output.

Sabah Forest department considers domestic legality assurance
Despite anticipation of the quiet period in industry over the New Year holidays, the industry in Sabah has been busy working on legality issues.

The companies exporting to Europe are focussed on the impending coming into force of the EUTR. Analysts report that the Sabah Forestry Department is studying how the State should approach development of a Sabah timber legality assurance scheme.

Data on timber exports from Sabah were released recently. Export levels for the period January to November 2012 are shown below, (prices are FOB basis):

Sarawak industries prepare for Australian due diligence
The industry in Sarawak is already experiencing quiet trading as overseas buyers are well aware that production will soon come to a standstill and company offices will close for the New Year holidays.

The Australian market is important for companies in Sarawak and the industry is watching developments in the Australian Illegal Logging Prohibition Act 2012.

Some companies in Sarawak are already preparing to meet the due diligence regulations so as not to disrupt timber exports to Australia.

Malaysian Furniture Fair strengthened by partnership with Muar Furniture Association
In a press release the Malaysian International Furniture Fair (MIFF) announced a strategic alliance with the Muar Furniture Association (MFA), one of the most prominent furniture industry groups in Malaysia.

Beginning in 2013, MFA will participate exclusively in MIFF, Southeast Asia¡¯s annual furniture trade show managed by UBM Asia, setting the stage for the biggest ever MIFF since its inception in 1995.

This is the first ever commitment of its kind by the MFA. Manufacturers in Muar account for 45% of Malaysian furniture exports from a base of about 500 manufacturers, including eight public-listed companies.

The participation of furniture manufacturers from Muar will further strengthen MIFF as the single biggest platform for Malaysian furniture known primarily for hardwood products.

MIFF 2013 will be held from March 5th to 9th 2013 at the Putra World Trade Centre and Matrade Exhibition and Convention Centre in Kuala Lumpur.

Moves to cool real estate market
Over the past two years growth in the real estate sector in Malaysia has been an important market for the timber industries in the country. However, the growth witnessed over the past years is expected to slow in 2013 as the government is determined to cool the sector.

The Malaysian government has introduced a 70 percent Loan-to-Value maximum on loans to those buying a third property and is now basing the loan assessment on net income rather than gross income

The government is also raising the property capital gains tax.

Analysts say that, while these changes will have an impact on new investment in the Malaysia¡¯s property market, long-term investors and people buying homes to occupy rather than for rent will provide a measure of continued growth in the housing market.

In the previous ITTO report (17:1 15th Jan 2013) the statistics on exports of plywood from Sarawak were incorrect. The correct data is: for the period January to November 2012, Sarawak exported 2,402,120 cu.m of plywood, valued at RM 3,634,972,141.



  Jakarta businesses hit by deadly floods
Indonesia¡¯s capital, Jakarta, was brought to a standstill by flooding which peaked on 17 January. Some 10 million people living and working in the city were affected and 20 people are reported to have died in flood related accidents.

The local media reports that more than 40,000 people were displaced and more than 100,000 homes and businesses were under water.

Most of the timber industries located in Jakarta, Banten and West Java had to postpone shipments during the 5 days of floods in Jakarta. Most exporters managed to re-arrange export schedule but some are facing delayed shipment penalties from buyers.

So far, there is no detailed information on the financial loses suffered by timber industries located in Jakarta, Tangerang, bekasi, and Banten. However, estimates put potential losses at around 1 trillion rupiah.

Analysts point out that some industries located in the flood hit pockets such as the Pulogadung industrial area and Tangerang Banten probably suffered financial losses because wood working machinery and raw materials were submerged.

Jakarta is surrounded by mountains and 13 rivers flow through the city to the Java Sea. The government has identified poor drainage in the catchment areas of Bogor-Puncak-Cianjur as contributing to the flooding of the Ciliwung river.

EU a major destination for processed wood products
The Indonesian Ministry of Forestry has reported that the volume of wood products export during the past 12 months totalled 1.01million cu.m for shipments to 94 countries, including EU member states.

The EU is a significant importer of Indonesian timber products.

While the volume of primary product exports to the EU was a modest 169.000 cu.m, or just 11% of the total export volume, exports of processed wood products to the EU were worth US$ 210 million or 22% of the total export value of all processed wood product exports.

Forestry and timber sectors could attract FDI
At the same time as the floods hit Jakarta the Government announced record high levels of foreign investment (FDI) during 2012. Total investments of Rp 313.2 trillion (US$32.5 billion), exceeding the target of Rp 283.5 trillion, were recorded.

Most of the investment was in the mining sector (17 percent of total FDI); followed by the transportation and telecommunication sectors (11 percent) and the pharmaceutical sector (11 percent).

Analysts point out that with the successful introduction of the domestic timber legality assurance scheme, there is a good chance that investment in the forestry and timber sectors will expand.

Indonesian SVLK satisfies EUTR
The Indonesian government has inaugurated a V-Legal/ FLEGT timber license system to boost timber sales globally and especially to meet the requirements of the EUTR.

The Indonesian government has said that when the EUTR enters into force in March this year, Indonesian wood products shipped by exporters with the domestic SVLK certificate will be deemed as satisfying the due diligence requirements of the EUTR It is said that around 1,500 companies nationwide have obtained SVLK certification.

Indonesia is the first Asian country to conclude negotiations of a Voluntary partnership Agreement (VPA) and the Indonesia/EU VPA is expected to be ratified in September this year.

EU importer expresses satisfaction with test shipment
The EU is a major destination for wood products from Indonesia and some EU member states recently participated in a test shipment of verified legal wood products from Indonesia.

The Netherlands Koninglijke Dekker Hout Group, which imports from Indonesia, participated in the test shipment and expressed satisfaction on the results of the test.

Indonesia looks forward to the early ratification of its VPA as this will bring tangible benefits to Indonesian exporters and European importers catering to demands of consumers in the EU.

Small companies offered help with SVLK certification
All wood product manufacturers in Indonesia are required to comply with the domestic timber legality assurance system. This requires that they secure third party verification.

The cost of securing the third party verification is a serious issue for small scale industries and the handicraft makers. Until now these small companies could not obtain financial or technical assistance to meet the new requirements.

The Indonesian government has allocated an initial Rp 3 billion (US$312,000) from the state budget to help subsidise small-scale producers in obtaining SVLK certification.



 What is causing weak demand for teak in EU?
Analysts say that, despite the easing of economic sanctions, the demand for teak in the EU, US and Japanese markets is low. Whilst the current economic downturn in the EU and US may be partly responsible for the poor demand for teak in these markets, other factors may be involved.

The number of companies in Thailand and Taiwan P.o.C manufacturing teak products for export to Europe and the US has fallen dramatically over the past few years.

Some traders suggest that teak seems to have lost the appeal it enjoyed in the 1980¡¯s and 90¡¯s and that efforts are required to stimulate the markets. The shrinking market for teak in Europe also seems to be linked to the decline in the quality of teak being made available.

High quality teak, the grades preferred by Japan, US and EU are not now readily available, reflecting the decline in the teak forests, say analysts. The teak forests in central Myanmar have been harvested over and over again and now yield only small quantities of high quality logs.

China and India major markets for teak
In recent years the log grades available have been mainly SG-4 and lower. European buyers tended to purchase mainly higher grade 4th Quality logs but the scarcity of higher grades has meant European buyers had to accept lower grades such as SG-4.

Lower grades such as SG-7 and SG-8 are available in large quantities and these grades are acceptable in the Indian market, especially now as the Indian rupee has fallen against major currencies.

It is estimated that 80% of Myanmar¡¯s teak log exports go to India. It is not possible to gauge the exact volume exported to China as only a small quantity is shipped out by sea to China and is thus carefully documented. Most teak for the Chinese timber industry is transported overland and documentation of this trade is a major problem.

Undecided on investment in processing capacity
While many longstanding and experienced exporters and traders are considering investing in wood processing industries in Myanmar in face of the proposed log export ban, it is reported that some still believe that the decision on the ban is reversible.

Plan needed to address forest degradation
The main issue confronting the forest authorities in Myanmar today, say analysts, is not a total or a partial log ban but how to ensure harvests are within the annual allowable cut to check forest degradation and deforestation.

In order to develop appropriate polices it is vital that the state of the forest is understood. There are conflicting reports on the forest cover which must be addressed.

According to the Myanmar forestry authority the forest cover is around 47% but according to the NGO community the forest cover is only around half of that.

Verification of the actual forest cover is will take time and will involve a considerable investment. Until such data is available there is a risk that harvest levels will be set too high.



  Timber imports through Kandla port grow as industries in vicinity expand
Kandla Port registered double digit cargo growth during 2011-12. Strong demand and increasing numbers of timber processing plants in the vicinity of the port has resulted in higher imports of logs through the port.

In 2010-2011 log imports through Kandla port were 3.728 million cubic metres, but in 2011-2012 the figure rose to 4.131 million cubic metres a rise of 10.8 %.

Currently there are 952 licensed wood working factories in and around Kandla and analysts expected more plants to be established in the Kandla and Mundra as the area is serviced by two very modern ports.

Over a 12 month period Kandla and Mundra ports handled some 992,000 cu.m of Meranti logs mainly from Malaysia, 301,000 cu.m of Gurjan / Keruing logs from Myanmar and Malaysia, some 1.4 mil. cu.m of Pine logs from New Zealand and Europe and 455,000 cu.m of Teak logs.

The major supplies of teak, both natural forest and plantation teak were Ecuador, Myanmar, Ghana, Costa Rica, Ivory Coast, Panama, Benin, Sudan, Brazil, Tanzania, Togo, El-Salvador and Nigeria.

It is estimated that nearly 70% of all timber imported by India moved through the ports of Kandla and Mundra. Analysts anticipate imports will exceed 5mil. cu.m in the current fiscal year. New modern port facilities are under consideration to service companies on the east coast of India.

Industry seeks reduction of State VAT on raw materials
The timber industries in the east have voiced concern over the high (15%) value added tax (VAT) charged by the state government. The industry argues that, as logs are the raw material input for industries the VAT should be reduced to 4% to bring it in line with rates charged by many other states.

Reviving wood based industries in N.E. India
Central and State Governments have development plans for N.E. region of India through a combination of private and public investment. Reviving the development of the plywood industry in the region is under consideration.

Demand in India for plywood continues to rise and the ever widening gap between supply and demand can only be met by imports.

The N.E. region of India was up until around 1966 a major centre for wood based industries. At that time almost 80% of India¡¯s requirements for plywood were being met from mills in that region.

To-day, mills in the N.E. provide to less than 10% of the plywood demand in the country.

The N.E. has a climate suitable for plantations of the fast growing species which are ideal for plywood manufacture. There is ample land available in and around villages, adjacent to forest areas and close to tea-plantations and deforested hills as well as along river banks.

Infrastructure in the region is adequate and there is a pool of experienced technicians and skilled workers. Reviving the wood based industries in the region would help reduce regional un-employment.

The agro-forestry developments in the northern Indian states of U.P., Punjab, Haryana and Uttaranchal are good examples of what can be achieved. A revival of the plywood industry in N.E. India would deliver many benefits.

Cross border trade with Myanmar set to grow
Relations between India and Myanmar are improving which could lead to expanded cross border trade. In the Border Trade Agreement of 1995 mechanisms for road transport of goods between India and Myanmar were established bringing economic benefits to both countries.

Observers point out that the roads used for this cross border trade need to be upgraded to make transportation of goods in both directions more efficient. When this is done the timber industry will benefit and so will other sectors for which the cross border trade is important.

The local prices for air dried Sawn timber per cubic foot, ex-saw mill remain unchanged and are shown below:

Average prices realised at sales held in Government Teak depots in Central India are shown below. The prices are per cubic foot ex depot.

Myanmar Teak processed in India
The demand in India for Myanmar teak remains steady. Analysts in India say that as the EU and US have improved relations with Myanmar the teak trade between Myanmar and the west may expand which will mean Indian importers will face increased competition.

Some Indian companies are already planning to shift processing capacity from India to Myanmar in response to the proposed 2014 log export ban in Myanmar.
Prices for Myanmar teak are shown below:

Price variations are mainly due to differences in lengths and diameter.

Despite the depreciation of the Indian rupee, teak sawnwood prices remain at pre-depreciation levels as Indian buyers are reluctant to pay higher prices. Some Indian manufacturers are replacing teak with durable non-teak hardwoods such as Merbau

High quality plantation teak arriving from Sudan
Presently, out of all the sources of West African plantation teak, logs coming from Benin are reportedly of the highest quality. The quality of plantation teak from Sudan and shipped through Mombassa in Kenya is highly regarded by Indian buyers and this is reflected in the log prices.

Current prices, C & F Indian ports, for Teak are shown below:

Indian plywood manufacturers seek protection from low cost imports
The domestic plywood industry continues to face severe competition from cheaper imports, mainly from China.

This is a matter of considerable concern in India as the small mills, which number over 1000 and which support employment, are suffering the most.

A request from industry for an anti-dumping levy to be imposed on some imports is being considered and support of Central Government is being sought by the various plywood manufacturer¡¯s associations.



  Inflation spikes in December but yearly target achieved
According to the Brazilian Institute of Geography and Statistics (IBGE), the inflation rate was higher than expected in December 2012.

The December Consumer Price Index (IPCA), at 0.79%, was the highest since March 2011. The December 2012 figure was the highest rate for a month of December since 2004.

Despite the spike in December inflation the Government reached its inflation control target for 2012, stipulated at 4.5% with a variation of two percentage points. In 2011, the inflation rate was 6.5%.

Further weakening of the Real against the US dollar
In 2012, the average real/US dollar exchange rate was BRL 1.95/USD. In 2011 the average was BRL 1.67/USD.

The average exchange rate in December 2012 came in at BRL 2.08/USD indicating a slight easing of the Brazilian currency against the US dollar.

Reduction in interest rate possible in second quarter
The Monetary Policy Committee (Copom) of the Central Bank (BC), in its last final meeting of 2012 and in the first meeting of 2013, decided to maintain the prime interest rate (Selic) at 7.25% per year.

Many financial analysts are of the opinio that the Selic rate should be maintained at its current level, at least during the first quarter of this year and that a reduction to 7% could be considered for the second quarter if the economy does not show signs of recovery.

Promoting investment in plantations not bonds
Investing in land and forest plantations is being promoted as an alternative investment in Brazil. Investment companies claim that yields on investment in Brazilian plantations in 2012 would have yielded better returns than on gold or US saving bonds.

Several companies are offering plantation land as an alternative investment. Investors can purchase plantation packages for as little as euro 6.200 to 500,000. The return on such an investment is only seen when the plantations mature and are harvested.

Brazilian entrepreneurs are optimistic that demand for wood products in the domestic and international markets will continue to grow.

The hosting of the Olympic Games and World Cup will involve considerable investment in construction leading to increased demand for wood products say analysts. Also, the Brazilian government is promoting building of more housing for low income families which will increase demand for wood products.

Demand for hardwood planting stock expected to rise
In 2012 the demand for seedlings of high value hardwood species for plantations exceeded expectations. Projections for 2013 anticipate a tripling of demand according to Tropical Flora Reflorestadora, a specialist company providing planting stock.

Investment in the so-called ‘green economy?is now being actively promoted and workshops have been organised by Tropical Flora to provide information on the potential of this type of investment.

Currently, the hardwood species that have been planted include Guanandi (Calophyllum brasiliense), African mahogany (Khaya ivorensis), Jequitib?Rosa (Cariniana legalis), Teak (Tectona grandis ) and Cana fístula (Peltophorum dubium).

Forestry experts say that farmers could plant such high value hardwoods alongside coffee, pupunha palm tree and other crops to generate higher income.

Round up of December 2012 timber exports
In December 2012,the value of wood products exports (except pulp and paper) fell 5.9% compared to values in December 2011, from US$ 218.6 million to US$ 205.7 million.

Pine sawnwood exports declined 30.4% in value in December 2012 compared to December 2011, from US$ 14.8 million to US$ 10.3 million. In terms of volume, exports dropped from 66,100 cu.m to 46,000 cu.m over the period.

Exports of tropical sawnwood fell 26% in volume, from 44,700 cu.m in 2011 to 33,100 cu.m in December 2012 compared to December 2011, (from US$ 24.7 million to US$ 16.4 million).

Pine plywood exports rose 21% in value in December 2012 compared to December 2011, from US$ 26 million to US$ 31.5 million. The volume increased was just over 19% in December, from 71,600 cu.m to 85,500 cu.m.

Exports of tropical plywood fell from 5,200 cu.m in December 2011 to 5,100 cu.m in December 2012, an approximate 2% decline.

A much higher rate of decline was observed in the value of tropical plywood exports in December where a 22% fall was registered, (US$ 3.6 million to US$ 2.8 million).

Brazilian exports of wooden furniture dropped from US$ 44.3 million in December 2011 to US$ 41.1 million in December 2012, a 7% decline.

"Orchestra Brazil"diversifies furniture export markets
A project called “Orchestra Brazil?is promoting diversification of export markets. This project is a partnership between Sindmóveis (Association of Furniture Industries of Bento Gonçalves) and Apex-Brazil (Brazilian Trade and Investment Promotion Agency).

The aim of “Orchestra Brazil?is to improve the competitiveness of Brazilian furniture exporters . This is being achieved through combining the expertise from manufacturers, suppliers, technologists and designers to the furniture sector. The target markets for this initiative are Peru, Paraguay, Uruguay and Argentina.

From 2005 ?2011 the annual import growth of companies associated with the “Orchestra Brazil?initiative in the four target markets was over 15% in Peru; 26% in Paraguay; 13% in Uruguay and 15% in Argentina. Research has concluded that this project was highly regarded in Peru, Paraguay and Uruguay.

Despite the declining imports by Argentina of furniture from Brazil, the result of barriers affecting bilateral trade say analysts, the country was the second largest importer of furniture from companies associated with the "Orchestra Brazil" initiative.

Brazilian sawmilling sector anticipates positive growth
The Brazilian sawnwood industry is forecasting positive growth in 2013 in anticipation of increased demand resulting from construction of facilities for the World Cup (2014) and the Olympic Games (2016). A further boost to demand will come from the government’s housing programme "My House My Life (Minha Casa Minha Vida)".

In other encouraging news the Brazilian Association of Mechanically Processed Timber Industries (ABIMCI) has indicated that the federal government intends to reduce payroll taxes for the sawnwood sector in 2013.

The Ministry of Development, Industry and Foreign Trade (MDIC) is said to be considering eliminating the tax on Industrialized Products (IPI) for plywood and also the 8% tax charged when the Brazilian forest products are exported to the US market.



  Civil society calls for greater dynamism in forestry reform
A group of civil society organizations has petitioned the head of the Ministry of Agriculture (Minag), Milton Von Hesse, for a more dynamic reform of the forest and wildlife sectors to, as they say, "give it competitiveness and inclusion ".

The petition mentions the status and progress in improving the policy and institutional framework of forestry management in the country and specifically recommends:

  the development of a new participatory policy for forestry and wildlife;

  the design and implementation of improved institutional arrangement and

  a revised Forest Act and Wildlife Act

The petition directed at the Ministry of Agriculture says "We urge your office to strengthen the team of the Forestry and Wildlife (DGFFS), providing dedicated staff necessary for the process, the necessary budget for implementation of activities and the political and institutional support of all Ministries¡¨.

Regarding the proposed draft National Forestry Policy and Wildlife (PNFFS), submitted in December 2012, the organizations asked to expand to 120 days the period for receiving input from the public¡¨.

The group further asked for greater transparency in progress with development of regulations being developed by the National Forestry and Wildlife Agency (SERFOR).

The petition to the Ministry was signed by organizations such as the Peruvian Society for Environmental Law (SPDA), Law Environment and Natural Resources (DAR), Peruvian Society for Ecological Development (SPDE), Proetica, Association for the Conservation of the Amazon Basin (ACCA), Center Indigenous Cultures of Peru (Chirapaq), the Centre for Environmental Sustainability Universidad Peruana Cayetano Heredia (CSA-UPCH), amongst others.

Forestry Training Centre in Peru
The Tropical Forest Foundation has launched a fundraising campaign to secure funds to accelerate the development of a training and education centre in Peru.

This centre would focus on how to balance sustainable forest management, demand for wood products, the ecological integrity of the forests and the economic welfare of local communities.

This training centre would, if funds are forthcoming be built in the Amazon region of Madre de Dios an area which has about 350,000 hectares of certified forest.



  Slow start to year for log exporters
A slowing of log exports in the early part of the month was observed, the cause of which say analysts, was the extended holidays in the main western markets. However, some Mora log contracts were shipped and prices were reported as fair for all categories.

Shipments of Undressed Greenheart sawnwood were concluded during the month but prices weakened for select grade.

On the other hand prices increases for Sound quality were recorded and prices rose from US$ 700 to US$ 721 per cubic metre. Prices for Merchantable quality were reported as only fair.

More species exported to the EU
There were no exports of Undressed Purpleheart sawnwood early in the month.

Undressed Mora sawnwood prices held steady, unchanged from December 2012. Europe is the main market for Undressed Mora sawnwood. Some of Guyana¡¯s lesser used species such as Burada, Darina, Fukadi and Kautaballi made their way to the European market and prices were reportedly satisfactory.

Dressed Purpleheart sawnwood prices were maintained at around US$ 1,080 per cubic metre. Guyana¡¯s Washiba (Ipe) sawnwood price remains very attractive to exporters who now earn a maximum price of US$ 2,300 per cubic metre, mainly form buyers for the North America market.

Suriname, a growing market for plywood
Prices for Guyana plywood BB/CC category held steady at around US$ 584 per cubic metre. Suriname is now a significant importer of plywood from Guyana.

The market for Splitwood (shingles) was reported as good during January and prices were at US$ 909 per cubic metre in the markets of the Caribbean.

Guyana revises export tax schedules
After a thorough consultative process the Government of Guyana published amendments to its policy on the export of logs and squares. The policy document sets out a schedule of increases in export taxes for specific species and products.

The new export duty rates has one schedule for logs and another for squares with dimensions of 20.3 cm x 20.3 cm and above.

The rate of export duty in Schedule A (logs) will be 15% in the first year, 17% in year two and 20% in the final year of the amended policy schedule.

The export duty rates applied to squares (Schedule B) will be 12% in the first year, 15% in year two and 17% in the final year. At the end of the three year period a decision will be made for future rates.

Exports of logs and squares of species not identified in either Schedule A or B will attract a 2% across the board flat rate of export duty.

The government policy notes that special consideration will be given to local companies or entities exporting squares (products with dimensions of 20.3 cm x 20.3 cm and above) which are to be used in the sizes exported for engineering end uses and applications.

The latest policy document extends the total restriction on the export of Crabwood (Andiroba) and Locust (Jatoba) logs.

This policy document is considered a significant way to further improve the performance of the sector through encouraging adding more value to forest products so as to contribute further to the development of Guyana forest sector.

See below for schedules for round logs and squares.



Source:ITTO'  Tropical Timber Market Report

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